Thursday, August 30, 2007

Tfl bids for Metronet

Transport for London is bidding to bring Metronet, the failed private consortium contacted to carry our maintenance on most of the London Underground, back into public ownership.
The Mayor of London’s transport authority last week announced that it had lodged an expression of interest with Metronet’s administrator and would make a formal offer by the end of next month.
TfL said that it “was in the best interests of all parties for an exit from administration as quickly as possible”.
The move follows the collapse last month of Metronet, which ran more than £2 billion over budget on repairs and refurbishments to nine London Underground lines, including the Victoria, District and Circle lines.
TfL would state only that it wanted to take control of the contractor on a “temporary basis”. But sources said that TfL executives were preparing to operate the business for two years, given the scale of inefficiency in the Metronet business and the time they believe that it would take to restore it to full health.
The decision would create a rift between Livingstone and Prime Minister Gordon Brown, who pushed through the public private partnership that put Metronet in charge of maintaining most of the Tube infrastructure.
The Government refused to hand control of the Tube network to the elected mayor until after the contracts had been signed.
Livingstone had always opposed the privatisation and was elected on that basis.
When Metronet called in the administrators last month Brown insisted that the PPP was working. He said: “If Metronet pulls out, then another private company will be found to take its place.”
Metronet was four years into a 30-year, £17 billion work programme, split into two contracts. It was attacked for vast cost overruns and a system under which work was handed out among its five shareholders rather than awarded by competitive tender. The latter approach is used by Tube Lines, the other London Underground contractor. TfL set aside £750 million last month to ensure that maintenance and repair work on the Metronet lines did not grind to a halt, putting a further strain on London taxpayers. Tim O’Toole, the London Underground managing director, said yesterday that TfL wanted to put in place a “stable, economic and efficient structure” at Metronet as quickly as possible. He added: “We strongly believe that the best and most effective way to achieve our ultimate goal is for an early exit from the administration process.”

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